New York hedge fund sees Cars.com as potential buyout target

Activist investor Starboard Value LP bought a 9.9% stake in Cars.com Inc. on the belief the stock is undervalued by a market that is betting heavily against it and ignoring the potential for a sale.

Starboard sees potential for the online auto marketplace to boost margins when it no longer has to share a large portion of its sales with the media companies that once controlled it, according to people familiar with the matter.